FAIS Act

Definition

The FAIS Act (Financial Advisory and Intermediary Services Act 37 of 2002) regulates anyone in South Africa who gives financial advice or renders intermediary services, which includes insurance brokers. A firm needs a Financial Services Provider licence from the FSCA, with key individuals responsible for management and oversight and representatives recorded on the FSP's representative register. All must meet the fit-and-proper requirements set out in Board Notice 194 of 2017: honesty and integrity, competence (qualifications, regulatory examinations, class of business and product-specific training), continuous professional development and operational ability. The General Code of Conduct adds disclosure, needs analysis, record of advice and a minimum five-year record-keeping duty. Complaints go to the FAIS Ombud.

What you need to know

The FAIS framework shapes a brokerage's WhatsApp operation in three concrete ways.

Authorisation follows the person, not the phone. A representative may only advise on the categories and sub-categories shown on the register; conversations about a product outside that scope must be handed to an authorised colleague. A shared inbox with assignment by product line makes that visible, whereas personal phones hide it.

Records must be complete and retrievable. Section 18 of the General Code requires records of advice, client instructions and communications to be kept for at least five years and to be available to the FSCA on request. A WhatsApp thread in which a representative discusses cover, premiums or exclusions is such a record. Exporting each client's history and attaching it to the client file is the minimum; keeping the conversation inside the CRM is simpler.

Supervision must be demonstrable. Key individuals are accountable for representatives under supervision, and the FSCA expects evidence of oversight. Read access to all conversations, with audit logs of who replied, provides that evidence without extra paperwork. The competence requirements, including the RE5 examination, and the Treating Customers Fairly outcomes have their own glossary entries. See setting up WhatsApp Business for a South African brokerage and the compliance hub.

Concrete example

During an FSCA visit, a Port Elizabeth brokerage is asked for the advice record on a client who switched funeral policies after a WhatsApp exchange. The compliance officer opens the client record, shows the conversation with the needs questions, the two quotes sent as text, the client's reply and the representative's name, then exports it as CSV for the inspector.